Spending Spree

Legislative Democrats allege one of the final acts of Republican Susana Martinez’ gubernatorial campaign last year was lying to the public.

The allegation follows a story published online by SFR on April 16 that reported a Martinez spokesman made a misleading statement about the campaign's financial status this spring. When Martinez faced pressure to donate campaign cash to charity because she received contributions from a Texas real-estate magnate accused of domestic violence, records show her campaign instead gave the last of its money to causes that could help her closest consultants profit from politics.

Officials with Martinez' campaign and administration have not replied to multiple phone messages and emails seeking comment about when they learned the details of what Las Vegas Metropolitan Police Department records describe as an incident in which campaign donor Mark Hiles slapped, choked and dragged a woman by the hair at a resort hotel.

But how the campaign admits to spending its remaining cash is a matter of public record.

Martinez' top political advisors—who have made money off the governor's multi-million-dollar political action committee since her first gubernatorial campaign—lost a key source of income when Martinez' victory last November termed her out of running for governor during the next cycle.

Any $8 million political action committee like that of Martinez might attract unsavory donors; even the most sophisticated political operation would struggle to vet the backgrounds of thousands who give. That's why how a campaign spends donations can be more telling of a candidate's priorities than who gives them.

Texas Republicans who took money from Hiles gave amounts equal to their contributions of just over $700,000 to anti-domestic violence causes and condemned violence against women in statements claiming they didn't know about the incident.

Yet when Martinez faced pressure from New Mexico's legislative Democrats to give the amount Hiles contributed to anti-domestic violence causes, she did something else. The campaign doled out checks to settle political scores and pay her political operatives.

Marcus Hiles, a Grand Prairie, Texas, luxury home developer, and his wife each contributed the $10,400 limit directly to Gov. Martinez' campaign in 2014, reports show, for a total of $20,800 in cash.

In March, New Mexico media outlets made the connection, revealing Hiles' guilty plea in February 2013 to a domestic violence misdemeanor, as reported in the Dallas Morning News. The daily paper quoted Hiles' attorney denying the police version of events and saying his client was a victim of attempted extortion. SFR reached Hiles on his cellphone, but he declined to comment.

Pressed by the Albuquerque Journal about whether Martinez' campaign would follow Lone Star Republicans and also relinquish the amount Hiles had given, Enrique Knell, then a spokesman for the governor's office, said it would not be "feasible" for the campaign to return the money.

"The campaign has long since ended, and you can't return money that's already been spent," Knell told the paper.

Yet a recent report to state regulators shows the committee had roughly $70,000 in its bank account the day the Journal published that story online in March.

Jim Farrell, a spokesman for Senate Democrats, says the revelation shows Martinez was "lying" about her campaign's ability to contribute campaign money to anti-domestic violence causes. Farrell also served as the campaign manager for Martinez' general election opponent, Democrat Gary King, who returned more than $35,000 in contributions made by registered sex offender Jeffrey Epstein. Martinez has also rejected political support from a registered sex offender and from the former owner of an abortion clinic chain, following SFR's inquires about the two benefactors.

"I just think it shows she doesn't mean it when she says domestic violence is important to her," Farrell says of Martinez. "I think it's hypocritical."

In addition to making contributions directly to Martinez' campaign, Hiles also contributed $100,000 to Advance New Mexico Now, a group that helped Republicans take over the House for the first time since the 1950s. He was the committee's largest single contributor, reports show.

In its April 13 report to the New Mexico secretary of state, Advance New Mexico Now said it had $27,768 in the bank. About $15,000 of its kitty came from the Martinez campaign on April 6—nearly a month after New Mexico In Depth first reported on Hiles' conviction and donations to Republicans across New Mexico.

Martinez' campaign also contributed $15,000 on April 1 to Albuquerque School Board candidate Peggy Muller-Aragon, who went on to defeat Kathy Korte, a fierce critic of Martinez' education policies. (Muller-Aragon's political committee did not report receiving the contribution on its campaign finance statements, and she tells SFR that's because the check arrived after the campaign reporting period for school board candidates.)

The Martinez campaign also paid $21,400 to McCleskey Media Strategies, the Albuquerque political consulting firm run by her top advisor, Jay McCleskey, on April 6, after it had knowledge of Hiles' legal troubles. Another $10,000 went to Susana PAC, the governor's political action committee, which finances down-ballot candidates who are supportive of Martinez' policies. The committee has used the same list of vendors, like McCleskey Media Strategies, in its expenditures for campaign services.

Advance New Mexico Now is also poised to serve as another source of revenue for McCleskey's firm in the future. It now lists Missi Sousa, Martinez' former campaign manager, as its treasurer. Sousa also now works for McCleskey's firm.

Martinez has built her political image on her career as a tough-on-crime district attorney who protects women and children. Her campaign hammered away at King for his role in the early release of the recidivist felon Michael Soutar, also known as the Casanova Con Man, specifically targeting female voters. "He preyed on women, stealing their life savings," said one radio ad.

In March, legislative Democrats who wanted Martinez to give up an amount equal to Hiles' contributions quoted the former White House Advisor on Domestic Violence, Lynn Rosenthal, as urging the governor to "demonstrate her commitment by donating the amount of Marcus Hiles' campaign contributions to New Mexico domestic violence causes" as a way to send a message about the behavior.

Other things apparently just got in the way. After spending another $7,738, on NetJets International, the private aviation company, on April 6, the Martinez campaign committee now reports $447 in the bank.